Bruce Ratner will reap a whopping 50-percent profit on his Atlantic Yards investment, a prominent Brooklyn lawmaker charged this week as he called for an end to the massive taxpayer subsidy of the mega-development.
“Ratner is telling New York City that they anticipate to make a $650-million return on a $1.35-billion investment and that in itself shows that there is absolutely no reason for taxpayers to fund this project,” said Councilman David Yassky (D–Brooklyn Heights).
The new charge comes after the release of financial documents that Ratner kept from public view until a lawsuit filed by two Albany legislators wrested them free last month.
The documents reveal the financial inner workings of the 22-acre residential, retail, arena and office project — a combination of some private investment, large tax breaks, $305 million in direct city and state subsidies (so far), below-market-rate costs for Ratner to acquire state-owned land, and $1.4 billion in low-interest, tax-exempt federal loans.
Yassky’s call for an end to Ratner subsidies comes just two weeks after Mayor Bloomberg — himself a strong supporter of Atlantic Yards — finally broke with Ratner, declaring that the developer “doesn’t need” an additional special tax break handed to him by the state Assembly.
The so-called “Ratner carve-out” — a special provision that would allow the developer to receive tax breaks on buildings that wouldn’t normally qualify — was inserted by quietly Assemblyman Vito Lopez (D–Bushwick) into an otherwise reform-minded bill that would expand tax credits for developers who include affordable housing in their projects.
But thanks to Lopez, Ratner would get the tax break on all 16 of his Frank Gehry–designed buildings — even the ones that include no affordable housing.
The mayor questioned Lopez’s motivation.
“[The bill is] going to hurt the very people that everybody talks about helping and gives some tax breaks to a developer that doesn’t need them and which we didn’t have to do,” Bloomberg said on his WABC radio show.
He estimated the tax exemption — dubbed by critics the “Ratner carve-out” — would cost the city $300 million, nearly double the $175 million originally estimated by government watchdogs
The mayor added, “I can only hope that the Governor stands up and vetoes [the bill],” which is pending in the Senate after the Assembly passed it on June 26.
The mayor’s public denouncement of the developer-specific bonus injected new political energy into the war against Atlantic Yards, which has become largely symbolic in the months since the project was approved.
This week, Assemblyman Hakeem Jeffries (D–Prospect Heights) and Sen. Velmanette Montgomery (D–Park Slope) sent a letter to Ratner asking him to “abandon … the special treatment set forth in the Atlantic Yards carve-out provision.”
“This preferential, lobbyist-negotiated treatment is completely unacceptable and undermines the integrity of the entire project,” the letter said, adding that “anything short of publicly abandoning … [the tax breaks] would justify a complete reexamination of the project.”
A spokesman for Ratner refused to comment on the letter.